Moody’s has announced that it has put the long-term credit ratings of seven Vietnamese banks on review for upgrade. Photo: sigmalive.com
Moody’s Investors Service has announced that it has put the long-term credit ratings of seven Vietnamese banks on review for upgrade on improvements of the operating and economic environment for banks.
The banks include An Binh Commercial JS Bank (ABB), Asia Commercial Bank (ACB), Military Commercial JS Bank (MBBank
), Saigon - Hanoi Commercial JS Bank (SHB), Saigon Thuong Tin Commercial JS Bank (Sacombank), Vietnam International Bank (VIB) and Vietnam Technological and Commercial JS Bank (TCB).
At the same time, Moody's has placed on review for upgrade the baseline credit assessments (BCAs) and long-term counterparty risk assessments (CRAs) of these seven banks and those of two more banks namely JSC Bank for Foreign Trade of Vietnam (Vietcombank
) and Vietnam Bank for Industry and Trade (VietinBank
Moody's expects to conclude the review on the Vietnamese banks within the next 90 days.
“The rating action reflects Moody's expectation that the more benign operating and economic environment for banks in Vietnam (B1 stable) will lead to improvements in the banks' credit profiles and notably their asset quality and profitability metrics, while also contributing to relative stability in their funding and liquidity,” said the credit rating agency.
Despite the improvement, Moody's considers that the Vietnamese banking system remains undercapitalized against the backdrop of rapid credit growth and a high share of legacy problem assets which are not always adequately disclosed on the banks' balance sheets.
“Moody's expects that these challenges will continue to persist in the medium-term, despite some improvements,” it added.
Summary of Moody's ratings of Vietnamese banks.